2 Oil Refiners Outperforming NVIDIA: Are They Better Buys Now?

The Iran war has dominated the headlines of business newspapers as increasing oil prices rattle the global market. Investors have been considering the oil-energy sector to spot the stocks that are benefiting from the strong commodity pricing environment.

At the same time, despite the major macroeconomic events unsettling global equity markets, investors continue to chase opportunities tied to the AI revolution. Against this backdrop, NVIDIA NVDA has long been one of Wall Street’s most sought-after stocks as it is viewed as one of the leading ways to gain exposure to the AI revolution.

It would not be surprising if investors allocating money to NVDA also began looking at select energy companies to capitalize on opportunities arising from the ongoing conflicts in the Middle East. After all, two leading U.S. refiners — HF Sinclair DINO and Par Pacific Holdings PARR — have already outperformed NVDA based on their recent share-price performance. Let’s delve deeper.

Refining Margin to Stay Exceptionally Strong

Per data from the International Energy Agency (IEA), the throughput of refineries across the globe in July plunged roughly 6% year over year. The reason for this is that globally, the energy market is experiencing disruption in fuel production due to the war in Iran and damage to Russian refining infrastructure. Thus, the supply of refined fuels such as gasoline and diesel is lower worldwide, and the IEA expects refining activity to remain weak in the third quarter.

The IEA has also forecast worldwide refinery throughput to slip by 2.5 million barrels per day in 2026. Most importantly, the key refiners in the United States have no other option but to operate at near maximum capacities, thereby generating exceptionally strong margins.

In other words, the high U.S. refinery utilizations are creating more opportunities for refiners like Par Pacific and HF Sinclair, which have soared 110.1% and 102.4%, respectively, year to date, outpacing NVDA’s 14.3% gain.

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Why PARR & DINO are Attractive Bets Now

Par Pacific continued to benefit from a strong refining market as it entered the third quarter. Its refining index, which is a rough measure of how profitable it is to turn crude oil into products like gasoline and diesel, was still very high in July at $31.34 per barrel, only slightly below the second-quarter average of about $33.

Demand for fuels remained strong, especially on the mainland, while global fuel inventories stayed relatively tight. In simple terms, there was still healthy demand for refined products and limited excess supply, which helped PARR continue earning attractive margins from its refineries.

PARR appears well-positioned to benefit from still-strong refining margins, firm fuel demand and tight global product inventories.

HF Sinclair is not going to be an exception. On its second-quarter 2026 call, the company mentioned that wars in the Middle East and Ukraine have disrupted refining capacities. DINO mentioned that inventories of fuel in the United States and in its key operating regions are low, especially when the demand for the end products remains healthy, thereby creating opportunities to continue to earn healthy refining margins. 

Last Words

While investors continue to pursue opportunities in the AI space, the favorable refining backdrop makes PARR and DINO stocks attractive right now. Both companies currently sport a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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